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No value maximization isn't always ethical. If it costs businesses more to add value to products and it jeopardizes whether the product will be purchase, than it is not ethical, since businesses have a duty to stockholders.
Elinor Murray
Wiki User
∙ 15y agoEnron - Smartest Guys in the Room - Hid $1.7 billion in losses through "special purpose entities" pocketing hundreds of millions. Shareholders lost over $50 billion. WorldCom - reported expenses as investments. Biggest bankruptcy in history Arthur Andersen example - "helping" Enron
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Is value maximization always ethical?
No value maximization isn't always ethical. If it costs businesses more to add value to products and it jeopardizes whether the product will be purchase, than it is not ethical, since businesses have a duty to stockholders.
What is the difference between profit maximization and value maximization?
discount rate
Explain wealth maximization and value maximization objectives of financial management?
Wealth maximization of financial management focuses on increasing fixed and current assets while value maximization focuses to strengthen intangible assets.
Differentiate between value for money and profit maximization concept in corporate governance?
differentiate between value for money and profit maximization
What are the difference between value maximation and profit maximation?
Value maximization and profit maximization are very much related, the main difference being- value maximization means increases in owners' wealth achieved by maximizing of the value of a firm's common stock. profit maximization is the process by which a firm determines the price and output level that returns the greatest profit. the other difference among the two could be sited as- value maximization is seen as long term objective of a firm, whereas profit maximization is generally a short term objective.
What is the wealth maximization?
Wealth maximization is a modern approach to financial management. It is also known as Value Maximization. The focus of financial management is on the value to owners or suppliers of equity capital. The wealth of owners is reflected in the market value of shares so wealth maximization implies the maximization of the market value of the shares or it simply means maximization of shareholder's wealth.
What are the basic objectives of financial management?
The objective of financial management is wealth maximization rather than profit maximization. Wealth maximization means the total value of the firm.
What is the difference between profit maximization and wealth maximization?
Shareholder wealth (more commonly referred to as shareholder value) is talking about the value of the company generally expressed in the value of the stock. Profit maximization refers to how much dollar profit the company makes.
Another name for stockholder wealth maximization is?
Another name for stockholder wealth maximization is maximization of the value of the common stock. Stockholders have little power in corporate decision making.
What is meant by wealth maximization in a corporate finance environment How are corporate securities contingent claims on the firm's value?
Wealth maximization has been accepted by the finance managers, because it overcomes the limitations of profit maximization. Wealth maximization means maximizing the net wealth of the company's share holders. Wealth maximization is possible only when the company pursues policies that would increase the market value of shares of the company.
What is ethical self?
Ethical self is value
In the context of the shareholder wealth maximization model discuss the managerial actions that can influence the value of the firm?
Managerial actions that can influence the value of the firm include preserving the reputation of the firm by being ethical and responsible. Also, they need to invest in providing quality services and products that will keep the firm competitive.
